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SIMS MOTOR TRANSPORT LINES, INC. v. U.S.

November 30, 1959

SIMS MOTOR TRANSPORT LINES, INC., PLAINTIFF,
v.
UNITED STATES OF AMERICA AND INTERSTATE COMMERCE COMMISSION (HOLLAND MOTOR EXPRESS, INC., DOYLE FREIGHT LINES, INC., C.A. CONKLIN TRUCK LINE, INC., SAGINAW TRANSFER COMPANY, INC., KRAMER BROS. FREIGHT LINES, INC., INTERSTATE MOTOR FREIGHT SYSTEM, WOLVERINE EXPRESS, INC., AND REGULAR COMMON CARRIER CONFERENCE OF AMERICAN TRUCKING ASSOCIATIONS, INC., INTERVENERS), DEFENDANTS.



Before Duffy, Circuit Judge, and Campbell and LA Buy, District Judges.

The opinion of the court was delivered by: Campbell, District Judge.

  This action is brought and the jurisdiction of this Court is invoked under the provisions of Title 49 U.S.C.A. § 305(g), Title 5 U.S.C.A. § 1009 and Title 28 U.S.C. § 2321 through 2323 inclusive, to set aside and annul orders of defendant Interstate Commerce Commission in Docket No. MC-C-1674, Sims M. Transport Lines, Inc., Revocation of Certificate, 66 M.C.C. 553 (1956), 72 M.C.C. 355 (1957), and 76 M.C.C. 467 (1958). In the administrative proceedings, the Commission determined that plaintiff's existing authority to transport "iron and steel articles", "iron and steel products", and "iron and steel, and articles made thereof", does not authorize the transportation of "tractors, traction engines, tools and parts for tractors and traction engines, and used foundry machinery". The petition for leave to intervene has heretofore been granted. Title 28 U.S.C. § 2323; Fed.Rules Civ.Proc. Rule 24, Title 28 U.S.C.

The Commission, on its own motion, by an order dated July 13, 1954, commenced an investigation proceeding in its Docket No. MC-C-1674, to determine whether Sims was transporting commodities not authorized by its certificate of public convenience and necessity which had been issued on March 12, 1952, in Docket No. MC-18738. This certificate is, in effect, a consolidation of four previously issued certificates. The history of these proceedings is described in the Commission's 1957 report (72 M.C.C. 355, 357-358):

    "On January 13, 1941, a certificate was issued
  in No. MC-18738 to respondent's predecessor,
  Elmer Sims, pursuant to an informally processed
  `grandfather' clause application. This
  certificate authorized the transportation, over a
  specified regular route, of iron and steel
  products between Chicago, Ill., and South Bend,
  Ind. On April 13, 1944, in No. MC-2982, as a
  result of another informally processed
  `grandfather' clause application, a certificate
  was issued to Otto Abshier, doing business as
  Otto Abshier Trucking Co. This certificate
  authorized the transportation, over irregular
  routes, of iron and steel products from Chicago
  to points in Ohio, Kentucky, and Indiana. On May
  24, 1943, in No. MC-52139, a certificate was
  issued to respondent's predecessor, Schiller
  Trucking Co., Inc., authorizing the
  transportation over irregular routes, of iron and
  steel, and articles made thereof, (1) between
  points in the Chicago commercial zone, on the one
  hand, and, on the other, points in a described
  portion of Michigan, and Cleveland and Mansfield,
  Ohio, and (2) between Detroit, Mich., and Warren
  and Youngstown, Ohio. On November 2, 1948, in No.
  MC-18738 (Sub-No.8), a certificate was issued to
  respondent's predecessor, Elmer W. Sims, doing
  business as Motor Transport Lines, pursuant to an
  application for an extension of operating rights.
  This certificate authorized the transportation,
  over irregular routes, of iron and steel articles
  from points in the Chicago commercial zone to
  points in Indiana, Ohio, and Kentucky. By virtue
  of various purchases, approved in proceedings not
  important here, the authority contained in all of
  these certificates was consolidated and is
  embraced in the single certificate issued to
  respondent on March 12, 1952."
  The matter was referred to an examiner of the Commission for a formal hearing. Plaintiff was represented by counsel in the hearing, and it introduced evidence, cross-examined witnesses, and filed formal pleadings. The Commission's Bureau of Inquiry and Compliance participated in the proceeding, and its counsel also introduced evidence, cross-examined witnesses, and filed pleadings. After the examiner issued his recommended report and order, Sims filed exceptions and the Bureau replied, which were considered by Division 1 of the Commission. On March 13, 1956, Division 1, acting for the Commission, issued its report (66 M.C.C. 553) in which it found that certain commodities had been transported by Sims beyond the scope of its certificate, and it ordered Sims to cease and desist from such carriage on or before May 11, 1956. On reconsideration, the entire Commission considered Sims' petition, the reply of the Bureau, and it also, upon its own motion, reopened the four dockets described in the 1957 report (72 M.C.C. at pp. 357-358), in order to have available all possible information to determine the sense in which the commodities in question were used at the time of the various grants. On July 15, 1957, in its report on reconsideration (72 M.C.C. 355), the Commission found that nothing in Sims' operating authority authorized transportation of tractors, traction engines, tools, and parts therefore, or used foundry machinery. Accordingly, it ordered Sims to cease and desist from such carriage of these goods from and after September 3, 1957. Thereafter, on August 13, 1957, plaintiff filed its complaint before this Court, seeking a temporary injunction against enforcement of the Commission order, and seeking to set it aside by a permanent injunction. On August 26, 1957, however, Sims petitioned the Commission again to reconsider its decision, and the Court, by order dated October 14, 1957, ordered this action held in abeyance until the Commission should finally dispose of the second petition for reconsideration. On May 27, 1958, the Commission issued its second report on reconsideration (76 M.C.C. 467), in which it again ordered Sims to cease and desist from the questioned transportation on or before July 17, 1958. After Sims amended its complaint to attack the second order on reconsideration, the Commission, by order dated July 7, 1958, postponed the effective date of the cease and desist order until further order of the Commission.

The basic issue before the Court, as it was before the Commission, is a simple one: Namely, does the plaintiff have the right to transport tractors, parts of tractors and used foundry machinery from Chicago and Melrose Park to Ohio, Kentucky and Indiana under a certificate which authorizes the transportation of "iron and steel products", "iron and steel articles", and "iron and steel, and articles made thereof"? The scope of judicial review to which plaintiff is here entitled has been determined by the Supreme Court of the United States. In Andrew G. Nelson, Inc. v. United States, 355 U.S. 554, 78 S.Ct. 496, 499, 2 L.Ed.2d 484, it is stated:

    "In ascertaining [the meaning of words used in
  operating authority issued by the Commission], we
  are not given carte blanche; just as `[t]he precise
  delineation of an enterprise which seeks the
  protection of the "grandfather" clause has been
  reserved for the Commission,' Noble v. United
  States, 319 U.S. 88, 93, [63 S.Ct. 950, 952, 87
  L.Ed. 1277] (1943), subsequent construction of the
  grandfather permit by the Commission is controlling
  on the courts unless clearly erroneous."

In footnote 4 of that same opinion, 355 U.S. at pages 558, 559, 78 S.Ct. at page 499, it is stated:

    "It is true, of course, that limitations on
  Commission power to modify motor carrier permits,
  established in § 212(a) of the Act, [49 U.S.C.A. §
  312(a)], cannot be by-passed under a guise of
  interpretative action. Commission interpretation of
  the meaning of a permit, being simply a

  definitive declaration of what rights existed
  from the very beginning under the permit, cannot
  be equated with modification, however, unless
  found to be clearly erroneous."

Plaintiff, in urging that the orders of defendant Commission be set aside and annulled, makes the following arguments:

"(1) The Commission erred in

    "(a) Reopening proceedings without assigning
  such matters for further hearing or permitting
  the filing of briefs.
    "(b) In its résumé of its reopening
  proceedings.
    "(2) The Commission erred in relying upon `iron
  and steel articles' list as set forth in ...

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